Chapter 2: Productivity

2. The manager of a crew that installs carpeting has tracked the crew’s output over the past
several weeks, obtaining these figures:
Week Crew Size Yards Installed
1 4 96
2 3 72
3 4 92
4 2 50
5 3 69
6 2 52

Compute the labor productivity for each of the weeks. On the basis of your calculations, what
can you conclude about crew size and productivity?
Solution:
Week Crew Size Yards Installed Labor Productivity (Yards Installed per Crew)
1 4 96 24
2 3 72 24
3 4 92 23
4 2 50 25
5 3 69 23
6 2 52 26

3. Compute the multifactor productivity measure for each of the weeks shown for production of
chocolate bars. What do the productivity figures suggest? Assume 40-hour weeks and an hourly
wage of $12. Overhead is 1.5 times weekly labor cost. Material cost is $6 per pound.
Week Output (Units) Workers Material (Ibs)
1 30,000 6 450
2 33,600 7 470
3 32,200 7 460
4 35,400 8 480

Solution:
Week Output Workers Material MFP(Units per dollar input)
(Units) (Ibs)
1 30,000 6 450 (30,000)/(450*6)+(6*40*12)+(6*40*12*1.5) =3.03
2 33,600 7 470 (33,600)/(470*6)+(7*40*12)+(7*40*12*1.5) =2.99
3 32,200 7 460 (32,200)/(460*6)+(7*40*12)+(7*40*12*1.5) =2.89
4 35,400 8 480 (35,400)/(480*6)+(8*40*12)+(8*40*12*1.5) =2.84
 Chapter 3: Forecasting

2. National Scan, Inc., sells radio frequency inventory tags. Monthly sales for a seven-month
period were as follows:
Month Sales (000 units)
Feb 19
Mar 18
Apr 15
May 20
Jun 18
Jul 22
Aug 20

Forecast September sales volume using each of the following: (1) A five month moving average.
(2) A weighted average using .60 for August, .30 for July, and .10 for June. (3) Exponential
smoothing with a smoothing constant equal to .20, assuming a March forecast of 19(000). (4) A
linear trend equation.
Solution:
(1) A five month moving average
September sales volume forecast = (15+20+18+22+20)/5 = 19(000) units
(2) A weighted average using .60 for August, .30 for July, and .10 for June
September sales volume forecast = (20*, 60 + 22*.30 + 18*, 10) = 20.4(000) units
(3) Exponential smoothing with a smoothing constant equal to .20, assuming a March forecast of
19(000)
Month Sales (000 units) Forecast (000 units)
Feb 19
Mar 18 19
Apr 15 19 +.20(18 – 19) = 18.8
May 20 18.8 +.20(15 – 18.8) = 18.04
Jun 18 18.04 +.20(20 – 18.04) = 18.43
Jul 22 18.43 +.20(18 – 18.43) = 18.34
Aug 20 18.34+.20(22 – 18.34) = 19.07
Sep 19.07+.20(20 – 19.07) = 19.26

(4) A linear trend equation.

y = a + bt
 Month, t Sales (000 units), y t2 Ty
(Feb) 1 19 1 19
(Mar) 2 18 4 36
(Apr) 3 15 9 45
(May) 4 20 16 80
(Jun) 5 18 25 90
(Jul) 6 22 36 132
(Aug) 7 20 49 140
28 132 140 542

b = {(7*542) – (28*132)}/ {(7*140) – (28)2} = (3794 – 3696)/ (980 – 784) = 98/196 = 0.50
a = (132 – 0.50*28)/7 = 16.86
September sales volume forecast = y = 16.86 + 0.50t = 16.86 + 0.50*8 = 20.86(000) units
3. A dry cleaner uses exponential smoothing to forecast equipment usage at its main plant.
August usage was forecasted to be 88 percent of capacity; actual usage was 89.6 percent of
capacity. A smoothing constant of .1 is used. a. Prepare a forecast for September. b. Assuming
actual September usage of 92 percent, prepare a forecast for October usage.
Solution:
a. Forecast for September = 88 + 0.1(89.6 – 88) = 88.16 percent of capacity
b. Forecast for October = 88.16 + 0.1(92 – 88.16) = 88.54 percent of capacity
4. An electrical contractor’s records during the last five weeks indicate the number of job
requests:
Week Requests
1 20
2 22
3 18
4 21
5 22

Predict the number of requests for week 6 using each of these methods: a. A four-period moving
average. b. Exponential smoothing with a smoothing constant .30. Use 20 for week 2 forecast.
Solution:
a. A four-period moving average
Forecast of requests for week 6 = (22+18+21+22)/4 = 20.75 = 21
b. Exponential smoothing with a smoothing constant .30
 Week Requests Forecast
1 20
2 22 20
3 18 20 +.30(22 – 20) = 20.6 =21
4 21 21 +.30(18 – 21) = 20.1 = 20
5 22 20 +.30(21 – 20) = 20.3 = 20
6 20 +.30(22 – 20) = 20.6 = 21

Cell phone sales for a California-based firm over the last 10 weeks are shown in the following
table. Plot the data, and visually check to see if a linear trend line would be appropriate. Then
determine the equation of the trend line, and predict sales for weeks 11 and 12
Week (t) Unit Sales (y)
1 799
2 724
3 720
4 728
5 740
6 742
7 758
8 750
9 770
10 775

Solution:
Week (t) Unit Sales (y) t2 ty
1 700 1 700
2 724 4 1448
3 720 9 2160
4 728 16 2912
5 740 25 3700
6 742 36 4452
7 758 49 5306
8 750 64 6000
9 770 81 6930
10 775 100 7750
55 7407 385 41358

b = [(10*41358) – (55*7407)]/ (10*385) – (55)2 = (413580 – 407385)/ (3850 – 3025) = 6195/825

= 7.51
a = 740.7 – (7.51*5.5) = 699.4
y = a + bt = 699.4 + 7.51t
For t = 11, y = 699.4 + 7.51*11 = 782
For t = 12, y = 699.4 + 7.51*12 = 790
Healthy Hamburgers has a chain of 12 stores in northern Illinois. Sales figures and profits for the
stores are given in the following table. Obtain a regression line for the data, and predict profit for
a store assuming sales of $10 million.
Unit Sales, x (in $ millions) Profits, y (in $ millions)
7 0.15
2 0.10
6 0.13
4 0.15
14 0.25
15 0.27
16 0.24
12 0.20
14 0.27
20 0.44
15 0.34
7 0.17

Solution:
x y x2 xy
7 0.15 49 1.05
2 0.10 4 0.2
6 0.13 36 0.78
4 0.15 16 0.6
14 0.25 196 3.5
15 0.27 225 4.05
16 0.24 256 3.84
12 0.20 144 2.4
14 0.27 196 3.78
20 0.44 400 8.8
15 0.34 225 5.1
7 0.17 49 1.19
132 2.71 1796 35.29

b = {(12*35.29) – (132*2.71)}/ {(12*1796) – (132) 2} = (423.48 – 357.72)/ (21552 – 17424) =

65.76/4128 = 0.0159
a = (2.71/12) – 0.0159*(132/12) = 0.0509
y = a + bx = 0.0509 + 0.0159x = 0.0509 + 0.0159*10 = 0.2099 million USD
20. An analyst must decide between two different forecasting techniques for weekly sales of
roller blades: a linear trend equation and the naive approach. The linear trend equation is Ft =
124 + 2t, and it was developed using data from periods 1 through 10. Based on data for periods
11 through 20 as shown in the table, which of these two methods has the greater accuracy if
MAD, MSE and MAPE are used?
t Units Sold
11 147
12 148
13 151
14 145
15 155
16 152
17 155
18 157
19 160
20 165

Solution:
Linear trend equation: Ft = 124 + 2t
t Units Sold Forecast Error Absolute Error Squared Error Error%
11 147 146 1 1 1 0.680272
12 148 148 0 0 0 0
13 151 150 1 1 1 0.662252
14 145 152 -7 7 49 4.827586
15 155 154 1 1 1 0.645161
16 152 156 -4 4 16 2.631579
17 155 158 -3 3 9 1.935484
18 157 160 -3 3 9 1.910828
19 160 162 -2 2 4 1.25
20 165 164 1 1 1 0.606061
Summation 23 91 15.14922

MAD = 23/10 = 2.3, MSE = 91/9 = 10.11, MAPE = 15.15%/10 = 1.52%

Naive approach:
t Units Sold Forecast Error Absolute Error Squared Error Error%
11 147
12 148 147 1 1 1 0.675676
13 151 148 3 3 9 1.986755
14 145 151 -6 6 36 4.137931
15 155 145 10 10 100 6.451613
16 152 155 -3 3 9 1.973684
17 155 152 3 3 9 1.935484
18 157 155 2 2 4 1.273885
19 160 157 3 3 9 1.875
20 165 160 5 5 25 3.030303
Summation 36 202 23.34033

MAD = 36/10 = 3.6, MSE = 202/9 = 22.44, MAPE = 23.34%/10 = 2.33%

11. A manager of a store that sells and installs spas wants to prepare a forecast for January,
February, and March of next year. Her forecasts are a combination of trend and seasonality. She
uses the following equation to estimate the trend component of monthly demand: Ft = 70 + 5 t,
where t = 0 in June of last year. Seasonal relatives are 1.10 for January, 1.02 for February,
and .95 for March. What demands should she predict?
Solution:
Forecast for January, February, and March of next year means forecast for t = 19, 20, 21 as t = 0
in June of last year.
t Trend component of monthly demand: Seasonal relatives Forecast
Ft = 70 + 5 t
19 165 1.10 182
20 170 1.02 173
21 175 0.95 166

12. The following equation summarizes the trend portion of quarterly sales of condominiums
over a long cycle. Sales also exhibit seasonal variations. Using the information given, prepare a
forecast of sales for each quarter of next year (not this year), and the first quarter of the year
following that.
Ft = 40 - 6.5t + 2t2
Where Ft = Unit sales t = 0 at the first quarter of last year
Quarter Relative
1 1.1
 2 1.0
3 0.6
4 1.3

Solution:
Forecast of sales for each quarter of next year (not this year) and the first quarter of the year
following that means forecast of sales for t = 8, 9, 10, 11, and 12 as t = 0 at the first quarter of
last year
t Trend component of quarterly demand: Relatives Forecast
Ft = 40 - 6.5t + 2t2
8 116 1.1 128
9 144 1 144
10 175 0.6 105
11 211 1.3 274
12 250 1.1 275
 Chapter 5: Capacity Planning
2. In a job shop, effective capacity is only 50 percent of design capacity, and actual output is
80 percent of effective output. What design capacity would be needed to achieve an actual output
of eight jobs per week?
Solution:
Actual output = 80 percent of effective output
Effective output = 8/80% = 10 jobs per week
Again, Effective output = 50 percent of design capacity
Design capacity = 10/50% = 20 jobs per week

3. A producer of pottery is considering the addition of a new plant to absorb the backlog of
demand that now exists. The primary location being considered will have fixed costs of $9,200
per month and variable costs of 70 cents per unit produced. Each item is sold to retailers at a
price that averages 90 cents. a. What volume per month is required in order to break even? b.
What profit would be realized on a monthly volume of 61,000 units? 87,000 units? c. What
volume is needed to obtain a profit of $16,000 per month? d. What volume is needed to provide a
revenue of $23,000 per month?
Solution:
Price (P) = 0.90, Variable Cost (VC) = 0.70, Fixed Cost (FC) = $ 9200/- per month
a. BEP = 9200/ (0.90 – 0.70) = 46,000 units per month
b. Profit = (0.90 – 0.70) * 61,000 – 9200 = $ 3000/-per month
c. 16,000 = (0.90 – 0.70) * V – 9200
V = 126,000 units per month
d. 23,000 = V * 0.90
V = 25,556 units per month
4. A small firm intends to increase the capacity of a bottleneck operation by adding a new
machine. Two alternatives, A and B, have been identified, and the associated costs and revenues
have been estimated. Annual fixed costs would be $40,000 for A and $30,000 for B; variable
costs per unit would be $10 for A and $11 for B; and revenue per unit would be $15. a.
Determine each alternative’s break-even point in units. b. At what volume of output would the
two alternatives yield the same profit? c. If expected annual demand is 12,000 units, which
alternative would yield the higher profit?
Solution:
a. BEP of A = 40,000/ (15 – 10) = 8000 units
BEP of B = 30,000/ (15 – 11) = 7500 units
b. V (15 – 10) – 40,000 = V (15 – 11) – 30,000
V = 10,000 units
c. Alternative A

12. A manager must decide how many machines of a certain type to purchase. Each machine can
process 100 customers per day. One machine will result in a fixed cost of $2,000 per day, while
two machines will result in a fixed cost of $3,800 per day. Variable costs will be $20 per
customer, and revenue will be $45 per customer. a. Determine the break-even point for each
range. b. If estimated demand is 90 to 120 customers per day, how many machines should be
purchased?
Solution:
(a)
BEP = 2000/ (45 – 20) = 80 customers per day
BEP = 3800/ (45 – 20) = 152 customers per day
(b)
One machine should be purchased
13. The manager of a car wash must decide whether to have one or two wash lines. One line will
mean a fixed cost of $6,000 a month, and two lines will mean a fixed cost of $10,500 a month.
Each line would be able to process 15 cars an hour. Variable costs will be $3 per car, and
revenue will be $5.95 per car. The manager projects an average demand of between 14 and 18
cars an hour. Would you recommend one or two lines? The car wash is open 300 hours a month.
Solution:
BEP = 6000/ (5.95 – 3) = 2034 cars per month (One line)
BEP = 10500/ (5.95 – 3) = 3559 cars per month (Two lines)
Demand: 4200 to 5400 cars per month
Supply: 4500 cars per month (One line), 9000 cars per month (Two lines),
One line can supply to match the demand of 4500 cars per month that will yield profit = 4500
(5.95 – 3) – 6000 = 7275
If the demand exceeds 4500 cars per month two lines will be required to have adequate supply
capacity in order to fulfill the demand yielding maximum profit = 5400 (5.95 – 3) – 10500 =
5430

Potential locations A, B and C have the cost structures shown below for manufacturing a product
expected to sell for Rs 2700 per unit. Find the most economical location for an expected volume
of 2000 units per year.
Location FC per year VC per unit
A 6000,000 1500
B 7000,000 500
C 5000,000 4000

Solution:
C = 6000,000 + 1500V (Location A) = 6000,000 + 1500 * 2000 = 9000,000
C = 7000,000 + 500V (Location B) = 7000,000 + 500 * 2000 = 8000, 000
C = 5000,000 + 4000V (Location C) = 5000,000 + 4000 * 2000 = 130, 00,000
Location FC per year VC per unit P per unit Profit for V = 2000 units per year
A 6000,000 1500 2700 2000*(2700 – 1500) – 6000,000 = -3600,000
B 7000,000 500 2700 2000*(2700 – 500) – 7000,000 = - 2600,000
C 5000,000 4000 2700 2000*(2700 – 4000) – 5000,000 = -7600,000
 Chapter 6: Process Selection and Facility Layout

1. An assembly line with 17 tasks is to be balanced. The longest task is 2.4 minutes, and the total
time for all tasks is 18 minutes. The line will operate for 450 minutes per day. a. What are the
minimum and maximum cycle times? b. What range of output is theoretically possible for the
line? c. What is the minimum number of workstations needed if the maximum output rate is to be
sought? d. What cycle time will provide an output rate of 125 units per day? e. What output
potential will result if the cycle time is (1) 9 minutes? (2) 15 minutes?
Solution:
Minimum cycle time = 2.4 minutes/unit
Maximum cycle time = 18 minutes/unit
Output per day = 450/2.4 =187.5 = 188 units
Output per day = 450/18 =25units
c. Nmin = 18/2.4 = 7.5 = 8
d. Cycle time = 450/125 = 3.6 minutes/unit
e. Output per day = 450/9 =50 units
Output per day = 450/15 =30 units
2. A manager wants to assign tasks to workstations as efficiently as possible and achieve an
hourly output of 331 ⁄3 units. Assume the shop works a 60-minute hour. Assign the tasks shown
in the accompanying precedence diagram (times are in minutes) to workstations using the
following rule: a. In order of most following tasks. b. What is the efficiency?
Solution:
Cycle time = 60*3/100 = 1.8 min/unit
Nmin = (1.4+.5+06+.7+.8+1+.5+.5)/1.8 = 6/1.8 = 3.33 = 4
Station Remaining Time Eligible Will Fit Assign/Task Time Station Idle Time
1 1.8 a a a/1.4
0.4 b None None 0.4
1.8 b b b/0.5
2 1.3 c,d,e e e/0.8
0.5 c, d None None 0.5
1.8 c, d d d/0.7
3 1.1 c c c/0.6
0.5 f, g f f/0.5
1.8 g g g/1.0
4 0.8 h h h/0.5
0.3 None None None 0.3
Total 1.2

Efficiency = 100 – (1.2/4*1.8)*100 = 83.33%

3. A manager wants to assign tasks to workstations as efficiently as possible and achieve an

hourly output of four units. The department uses a working time of 56 minutes per hour. Assign
the tasks shown in the accompanying precedence diagram (times are in minutes) to workstations
using the following rules: a. In order of most following tasks. Tiebreaker: greatest positional
weight. b. In order of greatest positional weight. Tiebreaker: most following tasks. c. What is the
efficiency?

Solution:
Cycle time = 56/4 = 14 min/unit
Nmin = (3+2+4+7+4+5+6+9+5)/14 = 45/14 = 3.21 = 4
 Most following tasks

Station Remaining Time Eligible Will Fit Assign/Task Time Station Idle Time
14 a, d, f d, f f/5
1 9 a, d, g a, g a/3
6 d, g, b g g/6
0 d, b None None
14 d, b d, b d/7
2 7 b, e b, e b/2
5 e, c c c/4
1 e None None 1
14 E e e/4
3 10 H h h/9
1 i None None 1
14 i i i/5
4 9 None None None 9

Total 11

Efficiency = 100 – (11/4*14)*100 = 80.36%

Greatest positional weight

Station Remaining Time Eligible Will Fit Assign/Task Time Station Idle Time
14 a, d, f d, f f/5
1 9 a, d, g a, g g/6
3 a, d, a a/3
0 d, b None None
14 d, b d, b d/7
2 7 b, e b, e b/2
5 e, c c c/4
1 e None None 1
14 e e e/4
3 10 h h h/9
1 i None None 1
14 i i i/5
4 9 None None None 9
 Total 11

Efficiency = 100 – (11/4*14)*100 = 80.36%

4. A producer of inkjet printers is planning to add a new line of printers, and you have been
asked to balance the process, given the following task times and precedence relationships.
Assume that cycle time is to be the minimum possible.

(1) Draw the precedence diagram. (2) Assign tasks to stations in order of most following tasks.
Tiebreaker: greatest positional weight. (3) Determine the percentage of idle time. (4) Compute
the rate of output in printers per day that could be expected for this line assuming a 420-minute
working day
Solution:
Cycle time = 1.3 min/unit
Nmin = (.2+.4+.3+1.3+.1+.8+.3+1.2)/1.3 = 4.6/1.3 = 3.54 = 4

Most following tasks

Station Remaining Time Eligible Will Fit Assign/Task Time Station Idle Time
1.3 a, c, e a, c, e a/0.2
1.1 c, e, b c, e, b b/0.4
1 0.7 c, e c, e c/0.3
0.4 e, d e e/0.1
0.3 d, f None None 0.3
1.3 d, f d d/1.3
2 0 f None None

1.3 f f f/0.8
3 05 g g g/0.3
 0.2 h None None 0.2
1.3 h h h/1.2
4 0.1 None None None 0.1

Total 0.6
Percentage of idle time = (0.6/4*1.3)*100 = 11.54%
Output in printers per day = 420/1.3 = 323 units
 Chapter 10: Quality Control
1. Specifications for a part for a DVD player state that the part should weigh between 24 and 25
ounces. The process that produces the parts has a mean of 24.5 ounces and a standard deviation
of .2 ounce. The distribution of output is normal.
a. What percentage of parts will not meet the weight specs?
b. Within what values will 95.44 percent of sample means of this process fall, if samples of n
=16
are taken and the process is in control (random)?
Solution:
Z25 = (25 – 24.5)/0.2 = 2.5 = 0.4938
Z24 = (24 – 24.5)/0.2 = - 2.5 = 0.4938
Therefore, {1 – (0.4938 + 0.4938)} * 100 = 1.24% of parts will not meet the weight specs
For 95.44 percent corresponding Z = +(-) 2
Hence, 2 = (x – 24.5) / (0.2/4), x = 24.6 ounces
Also, - 2 = (x – 24.5)/ (0.2/4), x = 24.4 ounces
Therefore, within 24.4- and 24.6-ounces 95.44 percent of sample means of this process will fall,
if samples of n =16 are taken and the process is in control (random).

2. An automatic filling machine is used to fill 1-liter bottles of cola. The

machine’s output is approximately normal with a mean of 1.0 liter and a
standard deviation of .01 liter. Output is monitored using means of samples
of 25 observations.
a. Determine upper and lower control limits that will include roughly 97
percent of the sample
means when the process is in control.
b. Given these sample means: 1.005, 1.001, .998, 1.002, .995, and .999, is
the process in control?
Solution:
For 97 percent corresponding Z = + (-) 2.17
UCL = 1.0 + 2.17 (0.01/5) = 1.004
LCL = 1.0 - 2.17 (0.01/5) = 0.996
Sample means: 1.005, and .995 fall outside the control limits, hence, the
process is not in control
3. The time to replace vehicle wiper blades at a service center was monitored using a mean and a
range chart. Six samples of n = 20 observations were obtained and the sample means and ranges
computed:
Sample Mean Range
1 3.06 0.42
2 3.15 0.50
3 3.11 0.41
4 3.13 0.46
5 3.06 0.46
6 3.09 0.45
Grand mean 18.6/6 = 3.1 2.7/6 = 0.45

a. Using the factors in Table 10.3, determine upper and lower limits for mean and range charts.
b. Is the process in control?
Solution:
From Table 10.3, for n = 20, A2 = 0.18 D3 = 0.41 D4 = 1.59
Mean chart:
UCL = 3.1 + 0.18 * 0.45 = 3.18
LCL = 3.1 - 0.18 * 0.45 = 3.02
Range chart
UCL = 0.41 * 0.45 = 0.19
LCL = 1.59 * 0.45 = 0.72
The process is in control

4. Computer upgrade times (in minutes) are being evaluated. Samples of five observations each
have been taken, and the results are as listed. Using factors from Table 10.3, determine upper and
lower control limits for mean and range charts, and decide if the process is in control.

Sample
1 2 3 4 5 6
79.2 80.5 79.6 78.9 80.5 79.7
78.8 78.7 79.6 79.4 79.6 80.6
80.0 81.0 80.4 79.7 80.4 80.5
78.4 80.4 80.3 79.4 80.8 80.0
 81.0 80.1 80.8 80.6 78.8 81.1

Solution:
Sample
1 2 3 4 5 6
79.2 80.5 79.6 78.9 80.5 79.7
78.8 78.7 79.6 79.4 79.6 80.6
80.0 81.0 80.4 79.7 80.4 80.5
78.4 80.4 80.3 79.4 80.8 80.0
81.0 80.1 80.8 80.6 78.8 81.1
Mean
79.48 80.14 80.14 79.6 80.02 80.38
Range
2.6 2.3 1.2 1.7 2.0 1.4

Average mean = (79.48 + 80.14 + 80.14 + 79.6 + 80.02 + 80.38)/6 = 79.96

Average range = (2.6 + 2.3 + 1.2 + 1.7 + 2.0 + 1.4)/6 = 1.87
From Table 10.3, for n = 5, A2 = 0.58 D3 = 0 D4 = 2.11
Mean chart:
UCL = 79.96 + 0.58 * 1.87 = 81.04
LCL = 79.96 - 0.58 * 1.87 = 78.88
Range chart
UCL = 2.11 * 1.87 = 3.95
LCL = 0 * 1.87 = 0
The process is in control
5. Using samples of 200 credit card statements, an auditor found the following:
Sample 1 2 3 4
Number with errors 4 2 5 9

a. Determine the fraction defective in each sample.

b. If the true fraction defective for this process is unknown, what is your estimate of it?
c. What is your estimate of the mean and standard deviation of the sampling distribution of
fractions defective for samples of this size?
d. What control limits would give an alpha risk of .03 for this process?
e. What alpha risk would control limits of .047 and .003 provide?
f. Using control limits of .047 and .003, is the process in control?
g. Suppose that the long-term fraction defective of the process is known to be 2 percent. What
are the values of the mean and standard deviation of the sampling distribution?
h. Construct a control chart for the process, assuming a fraction defective of 2 percent, using
two-sigma control limits. Is the process in control?
Solution:
Sample 1 2 3 4
Number with errors 4 2 5 9
Fraction defective 0.02 0.01 0.025 0.045

If the true fraction defective for this process is unknown, the estimate of it will be the average of
sample fraction defective = (0.02 + 0.01 + 0.025 + 0.045)/4 = 0.1/4 = 0.025
Estimate of the mean and standard deviation of the sampling distribution of fractions defective
for samples of this size: Mean = 0.025, SD = 0.011, here p = 0.025, n= 200
For an alpha risk of .03, corresponding Z = 2.17 (Probability 0.485)
UCL = 0.025 + 2.17 * 0.011 = 0.04887
LCL = 0.025 - 2.17 * 0.011 = 0.00113
For control limits of .047 and .003, alpha risk would be:
0.047 = 0.025 + Z * 0.011, 0.003 = 0.025 - Z * 0.011
Z = 2 (Probability 0.4772), alpha risk = 2 * (0.5 – 0.4772) = 0.0456 =4.56%
Yes, the process is in control.
Mean = 0.02, SD = 0.0099, here p = 0.02, n= 200
UCL = 0.02 + 2 * 0.0099 = 0.0398
LCL = 0.02 - 2 * 0.0099 = 0.0002
No, the process is not in control.
6. A medical facility does MRIs for sports injuries. Occasionally a test yields inconclusive results
and must be repeated. Using the following sample data and n = 200, determine the upper and
lower control limits for the fraction of retests using two-sigma limits. Is the process in control?
Sample 1 2 3 4 5 6 7 8 9 10 11 12 13
No. of retest 1 2 2 0 2 1 2 0 2 7 3 2 1
Solution:
Sample 1 2 3 4 5 6 7 8 9 10 11 12 13
No. of retest 1 2 2 0 2 1 2 0 2 7 3 2 1
fraction of retests .005 .0 .01 0 .0 .005 .01 0 .01 .035 .015 .01 .005
1 1

Average of retests fraction = 0.0096, SD = 0.00689

UCL = 0.0096 + 2 * 0.00689 = 0.02338
LCL = 0.0096 - 2 * 0.00689 = - 0.00418 = 0
Sample no. 10 is outside of the UCL
7. The postmaster of a small western town receives a certain number of complaints each day
about mail delivery. Determine three-sigma control limits using the following data. Is the process
in control?
Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14
No .of complaints 4 1 14 8 9 6 5 12 13 7 6 4 2 10
0

Solution:
Sample mean = 7.87, SD = 2.81
UCL = 7.87 + 3 * 2.81 = 16.3
LCL = 7.87 - 3 * 2.81 = - 0.56 = 0
Yes, the process is in control
8. Given the following data for the number of defects per spool of cable, using three-sigma
limits, is the process in control?
Observation 1 2 3 4 5 6 7 8 9 10 11 12 13 14
No .of defects 2 3 1 0 1 3 2 0 2 1 3 1 2 0

Solution:
Sample mean = 21/14 = 1.5, SD = 1.22
UCL = 1.5 + 3 * 1.22 = 5.16
LCL = 1.5 - 3 * 1.22 = - 2.16 = 0
Yes, the process is in control
 9. After a number of complaints about its directory assistance, a telephone company examined
samples of calls to determine the frequency of wrong numbers given to callers. Each sample
consisted of 100 calls. Determine 95 percent limits. Is the process stable (i.e., in control)?
Explain.
Sample 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
No .of errors 5 3 5 7 4 6 8 4 5 9 3 4 5 6 6 7
Fraction of .05 .03 .05 .07 .04 .06 .08 .04 .05 .09 .03 .04 .05 .06 .06 .07
errors

Solution:
Sample mean = 0.87/16 = 0.054, SD = 0.0226, for 95% corresponding Z = 1.96
UCL = 0.054 + 1.96 * 0.0226 = 0.098
LCL = 0.054 - 1.96 * 0.0226 = 0.01
Yes, the process is in control
12. The time needed for checking in at a hotel is to be investigated. Historically, the process has
had a standard deviation equal to .146. The means of 39 samples of n = 14 are
Sample Mean Sample Mean Sample Mean Sample Mean
1 3.86 11 3.88 21 3.84 31 3.88
2 3.90 12 3.86 22 3.82 32 3.76
3 3.83 13 3.88 23 3.89 33 3.83
4 3.81 14 3.81 24 3.86 34 3.77
5 3.84 15 3.83 25 3.88 35 3.86
6 3.83 16 3.86 26 3.90 36 3.80
7 3.87 17 3.82 27 3.81 37 3.84
8 3.88 18 3.86 28 3.86 38 3.79
9 3.84 19 3.84 29 3.98 39 3.85
10 3.80 20 3.87 30 3.96

a. Construct an x-chart for this process with three-sigma limits. Is the process in control?
b. Analyze the data using a median run test and an up/down run test. What can you conclude?
Solution:
Mean of sample distribution = 3.85, SD of sample distribution = 0.146/root
over 14 = 0.039
UCL = 3.85 + 3 * 0.039 = 3.967
LCL = 3.85 - 3 * 0.039 = 3.733
No, the process is not in control
Run test:
Median: 3.85, N = 39
Sample Mean Sample Mean Sample Mean Sample Mean
1 3.86 A 11 3.88 A 21 3.84 B 31 3.88 A
2 3.90 A 12 3.86 A 22 3.82 B 32 3.76 B
3 3.83 B 13 3.88 A 23 3.89 A 33 3.83 B
4 3.81 B 14 3.81 B 24 3.86 A 34 3.77 B
5 3.84 B 15 3.83 B 25 3.88 A 35 3.86 A
6 3.83 B 16 3.86 A 26 3.90 A 36 3.80 B
7 3.87 A 17 3.82 B 27 3.81 B 37 3.84 B
8 3.88 A 18 3.86 A 28 3.86 A 38 3.79 B
9 3.84 B 19 3.84 B 29 3.98 A 39 3.85 Tie
10 3.80 B 20 3.87 A 30 3.96 A

Observed runs: 18 (Assigning B to Tie, ignoring the Tie)

Expected no. of runs: (39/2) + 1 = 20.5
Observed runs: 19 (Assigning A to Tie, not ignoring the Tie)
Difference between observed and expected runs is higher Assigning B to Tie,
ignoring the Tie.
Hence, Assigning B to Tie, ignoring the Tie is appropriate.
SD = Root of (39 – 1)/4 = 3.08
Z = (18 – 20.5)/3.08 = - 0.82
Random variations as Z is within – 2
Sample Mean Sample Mean Sample Mean Sample Mean
1 3.86 11 3.88 U 21 3.84 D 31 3.88 D
2 3.90 U 12 3.86 D 22 3.82 D 32 3.76 D
3 3.83 D 13 3.88 U 23 3.89 U 33 3.83 U
4 3.81 D 14 3.81 D 24 3.86 D 34 3.77 D
5 3.84 U 15 3.83 U 25 3.88 U 35 3.86 U
6 3.83 D 16 3.86 U 26 3.90 U 36 3.80 D
7 3.87 U 17 3.82 D 27 3.81 D 37 3.84 U
8 3.88 U 18 3.86 U 28 3.86 U 38 3.79 D
9 3.84 D 19 3.84 D 29 3.98 U 39 3.85 U
10 3.80 D 20 3.87 U 30 3.96 D

Observed runs: 29
Expected no. of runs: (2*39 – 1)/3 = 25.67
Observed runs: 29
SD = Root of (16*39 – 29)/90 = 2.57
Z = (29 – 25.67)/2.57 = 1.30
Random variations as Z is within +2
21. A process that produces computer chips has a mean of .04 defective chip and a standard
deviation of .003 chip. The allowable variation is from .03 to .05 defective.
a. Compute the capability index for the process.
b. Is the process capable?
Solution:
Capability index for the process = (0.05 – 0.03)/ (6 * 0.003) = 0.02/0.018 = 1.11
The process is not capable as the capability index for the process is less than 1.33
22. Given the following list of processes, the standard deviation for each, and specifications for a
job that may be processed on that machine, determine which machines are capable of performing
the given jobs.
Process SD (in) Job Specification (+ -)
1 .02 .05
2 .04 .07
3 .10 .18
4 .05 .15
5 .01 .04

Solution:
Process SD (in) Job Specification 3 * SD Job Specification/(3 *
(+ -) SD)
1 .02 .05 .06 0.83
2 .04 .07 .12 0.58
3 .10 .18 .30 0.60
4 .05 .15 .15 1.00
5 .01 .04 .03 1.33

Process 5 is capable
24. Each of the processes listed is non-centered with respect to the specifications for that process.
Compute the appropriate capability index for each, and decide if the process is capable.
Process Mean SD Lower Spec Upper Spec.
H 15 0.32 14.1 16
K 33 1.00 30.0 36.5
T 18.5 0.40 16.5 20.1

Solution:
Process Mean SD Lower Spec Upper Spec. (Mean – LS)/ 3SD (US – Mean)/ 3SD
H 15 0.32 14.1 16 0.94 1.04
K 33 1.00 30.0 36.5 1 1.17
T 18.5 0.40 16.5 20.1 1.67 1.33

Process T is capable

Chapter 13: Inventory Management

Chapter 16: Scheduling
Chapter 17: Project Management
Chapter 19: Linear Programming